John Mackey and Corporate Responsibility

A year and a half ago, at the Iowa State Fair, Mitt Romney told a protester, "Corporations are people, my friend." This line, ferociously derided by Democrats and weakly defended by Republicans, will likely play a significant part in the historical lore of the most recent Presidential election. The line is, on a pretty basic level, nonsensical—x is not y—and imbues corporate behemoths with a far greater beneficence than they deserve. That said, it has acquired some resonance now as John Mackey, founder and CEO of Whole Foods, is essentially making an argument for Romney's position. While on tour for his tome, Conscious Capitalism, Mackey has done a spirited job of trying to put a human face on a brutally impersonal economic system. I'm not sure he succeeds.

In Mackey's view, "conscious capitalism" creates value for "stakeholders," i.e., customers, employees, investors, the environment and so on. The stakeholders, which the company describes as "people who are interested and benefit from the success of our company," is a major part of the story Whole Foods tells about itself. And it's a nice story, so long as you ignore the trees for the forest. To Mackey's credit, his recent interview with Mother Jones was terrifically revealing. The first thing you notice is the corporate company he'd like to keep:

MJ: Is Whole Foods' success really a model for anything besides businesses that cater to a sustainability niche?

JM: Many conscious businesses with similar business practices are primarily low-price oriented, such as Southwest Airlines, Costco, and Amazon. I believe our philosophy of conscious capitalism will eventually be widely adopted primarily because it is a better way to do business, and it creates more total value in the world for all of its stakeholders.

Of the companies Mackey cites, Amazon ought to raise a red flag. It certainly did with the reporter, who observes that "much of [Amazon's] competitive advantage derives from evading state and local sales taxes and using low-wage temp workers in its warehouses." Indeed, Mac McClelland wrote a powerful story about what it's like to be a "stakeholder" in an Amazon warehouse. (It's not pleasant reading.) Demos has written extensively about the revenue lost from Amazon's evasion of taxes. It's telling, and not in a flattering way, that Mackey views this company as a model of "conscious capitalism."

Later in the interview, Mackey says he's "not opposed to the existence of labor unions," but he's proceeds to mangle history in order to disparage them:

The truth that the labor union movement is very resistant to seeing is that the industries that have been the most heavily unionized in the United States have all been in decline and do not compete well internationally—automobiles, steel, airlines, conventional supermarket chains, and most unionized manufacturing.

In the case of the airline industry, this just isn't true. The locus of the airlines decline, most historians would agree, is the deregulatory efforts of the late 1970s. This was not, however, at the behest of the labor unions. As Washington Monthly (where, I ought to disclose, I occasionally contribute) noted last year, the decision by Edward Kennedy, the Carter administration and Ralph Nader, among others, to "blow up" the regulation of airlines was in fact "over the strong objections of the airline unions[.]"

Mackey's view of history, and his assignation of blame for industrial decline, suggests that all "stakeholders" are not necessarily created equal. He's the same guy, after all, who several years ago said the Employee Free Choice Act was "not the way we normally do things in the United States" and "violates a bedrock principle of American democracy." Right: Life liberty and the pursuit of happiness—but not really!

Of course, this POV is of apiece with Mackey's contention that the Affordable Care Act is "fascism," which, Mackey's backpedalling notwithstanding, I suspect he actually believes to be true. For the pretty talk about "team members" and "stakeholders," we're really just talking about workers and wage slaves. Corporations are people, and they are rarely treated well by the tip of the pyramid. Mackey is probably the prettiest face capitalism can find, and I hope he keeps talking.